In 2011 the situation in human resources was characterised by the unusually swift changes in the macroeconomic environment and some previously unfamiliar short-term consequences of the crisis. The Group’s workforce withstood this trial successfully – thanks not least to the performance and commitment of the staff.
The speed and effectiveness of reaction are still risk factors, however, which we are working on by further extending arrangements to make staff rostering more flexible.
One increasing challenge for human resources is to make a greater distinction in the Group between the use of long and short-term management tools. The size and heterogeneity of the companies and the volatility of the business described above, which affects the Group’s employees in different places and at different times, require staff numbers to be increased and reduced in parallel. At the moment for instance, staff capacity in the administrative areas particularly needs to be reduced further. Whereas Lufthansa Systems has completed the consolidation of the company and the related redundancies successfully and at an acceptable social cost, Austrian Airlines and Germanwings still have to make further efforts to become competitive. Redundancies are always only a last resort, but are nevertheless sometimes unavoidable. Our approach is defined by a clear preference for a social balance and an active internal placement policy within the Group. This also benefits our reputation in the labour market. It helps us to build up staff capacity again quickly in other areas of the Group. In the reporting year flight operations at Lufthansa Passenger Airlines grew again including a significant hiring requirement. Here the strategy pays off of working to professionalise human resources systems at times of low economic growth, in order to prepare them for the subsequent upturn. We make good use of our modern systems and methods in personnel marketing and staff development to meet our qualitative and quantitative human resources targets. The aim is to create the conditions today for being able to select new employees from among the best in the future, even in different demographic circumstances and different phases of the labour market.
Further classical human resources risks exist in the area of collective bargaining and codetermination. They are concentrated in the sphere of wage settlements and retirement benefits. The risks inherent in the negotiations that need to be held in the different companies are all the greater for the broad differences in the companies’ competitive environments. In a traditionally intensive dialogue with trade unions and works councils we try to ensure predictability and security as well as an appropriate share of economic gains for the Group and its employees by means of long-term agreements with company-specific and performance-related components. Collective bargaining disputes, potentially including strikes, are systemic, however, and again cannot be ruled out for 2012. In addition to the damage it does to Lufthansa’s image as a dependable service provider, strike action also entails the risk of considerable revenue losses and additional costs. This risk is also run if Lufthansa is affected indirectly by strikes in other areas of the value chain.
The Air Transport Employers’ Federation, introduced in 2010 to carry out collective bargaining for several segments within the Group, has worked well. It reflects the new demands of collective bargaining in the Group and also creates a lobbying platform for the airline industry, in legislative matters for instance and by giving added weight to representation in overarching employers’ associations.
The rulings of the Federal Labour Tribunal have departed from the principle of uniform collective bargaining, creating legal uncertainty and opening the door for collective bargaining partners to pursue special interests more vigorously. This jeopardises the principle of abidance by collective bargaining agreements, with corresponding effects on operations and the wider economy.
Employees’ qualifications are a decisive competitive factor, as is staff development aimed at creating a high-performance management team. The scope of our risk management in this respect can be judged by investments in education and training amounting to EUR 190m in 2011 in addition to our sophisticated, sustainable staff development instruments.
Following the expansion of the Group investment portfolio we have been careful to maintain the identities and autonomy of the companies acquired and to use our cosmopolitan culture to preserve the specific commitment of the staff employed there. Wherever closer cooperation and integration of individual workforces makes sense, a structure of joint dialogue and decision making ensures that optimised solutions are reached. These do justice to both local and broader Group interests and obligations.
If risks should arise from epidemic hazards, professional medical services and detailed pandemic plans are at the ready, as in prior years.
Members of the Executive Board and Supervisory Board are personally liable to the Company for damages resulting from a culpable breach of their fiduciary responsibilities. Lufthansa has taken out a D&O (directors’ and officers’ liability insurance) policy with an excess in line with the German Corporate Governance Code for both Boards.